Possible ethical violation cited in audit report
MORGAN CITY, La. — The results of the city’s 2012 audit report show the city may have committed a violation of Louisiana’s Ethical Standards for Public Servants stemming from some of the city’s public works contracts using a subcontractor in which a city employee had a substantial economic interest.
The ethical standards state, in part, that “no public servant (defined as a public employee or elected official)” or member of a public servant’s immediate family or legal entity, in which he has controlling interest, shall bid or enter into any contract, subcontract, or other transaction that is under the supervision or jurisdiction of the agency, according to the audit report.
The report was performed by CPA firm Kolder, Champagne, Slaven & Company LLC.
The summary of the report presented at the June 25 council meeting did not cite specifics about the possible ethics violations or the name of the city employee who had a substantial interest in the subcontractor. The full audit report did not state any names or further details about the subcontractor in question either, Mayor Frank “Boo” Grizzaffi said.
However, Grizzaffi said, “We are aware of the situation. We are fully cooperating with the ethics commission, and until they report their findings we have no other further comment. ... Because it’s under investigation, we don’t feel like we can support that with a name, other than to say this was going on before I got here and that we are fully aware of it,” Grizzaffi said.
Gerald Thibodeaux of Kolder, Champagne, Slaven & Company recommended that the city consult with legal counsel and with the ethics administration to determine if a violation has occurred, he said at the city’s June 25 council meeting. He also suggested the city review its ethics policy and communicate it to the employees, he said.
The auditor issued “unqualified opinions” on the city’s primary government financial statements, which mean the statements are “clean” and comply with regulations, Thibodeaux said.
The auditor also found two issues with regard to the city’s use of federal programs, but both issues were corrected before the city submitted for funding reimbursement, Thibodeaux said.
FEMA reimburses government entities use of their equipment and overtime for emergency response.
The first issue was that the rate schedule being used to document the use of equipment during Hurricane Isaac response was an outdated rate schedule, so the request for reimbursement from FEMA was going to be overstated.
The auditor advised the administration of that, and the city made the changes before submitted the reimbursement requests, he said.
The second issue had to do with use of equipment and employee using the equipment be documented as being used in a disaster related event. The issue was that employees’ time was not being documented as being disaster-related, so they could tell whether the work was related to Hurricane Isaac response, Thibodeaux said. This issue was also resolved and the correct time sheets were submitted to FEMA, Thibodeaux said.
The auditor found instances in the financial statements of assets being omitted from the capital asset listing, items being recorded in incorrect funds and some items being recorded in incorrect years, Thibodeaux said.
The auditor determined the city to be a low-risk auditee, the report stated.